AT&T Plans To Cut 12,000 Jobs, Reorganize Divisions

AT&T, one of the largest phone companies in the world, has fallen victim to economic turbulence. AT&T announced Thursday it will cut four percent of its workforce, or 12,000 jobs.

With 303,530 employees worldwide and $120 billion in pro-forma revenue in 2007, AT&T said the cuts are the result of a poor economy and an effort to reorganize and focus on specific businesses within the company, including wireless, broadband and video.

"It's another sign of the times, unfortunately, but it is one that won't likely have much impact on the consumer directly," said Michael Gartenberg, vice president for mobile strategy at Jupitermedia.

A Silver Lining

AT&T also plans to reduce 2009 capital expenditures from 2008 levels, according to the company. Plans for 2009 are being finalized and the company is expected to provide guidance when it releases its fourth-quarter results in January.

The cuts come after AT&T said in April it would cut 4,600 jobs as well as a three-year plan reported at the end of last year to cut 10,000 jobs. AT&T is joining businesses in both the financial and technology sectors that have had to reduce employment, including Citigroup, Bank of America, and Circuit City. Viacom on Thursday said it will cut its workforce by seven percent, or 850 jobs, while Adobe Systems announced on Wednesday it will let go eight percent of its employees, or 600 jobs.

While the cuts going into the holiday season will affect thousands, job offers will come in other areas that have growth, including AT&T's wireless and broadband businesses.

In 2007, AT&T added more than nine million subscribers and at year's end had 70.1 million wireless customers, in part due to being the exclusive U.S. wireless carrier for the Apple iPhone. In fact, 30 percent of U.S. consumers who purchased Apple's iPhone 3G from June through...